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……….. The Constitution is primarily for the common man. Larger interest and welfare of student community to promote merit, achieve excellence and curb malpractices, fee and admissions can certainly be regulated.

…… Supreme Court

The Supreme Court made these observations while examining the validity/vires of the provisions of the statute passed by the State Legislature, which is known as ‘Niji Vyavasayik Shikshan Sanstha (Pravesh Ka Viniyaman Avam Shulk Ka Nirdharan) Adhiniyam, 2007’ (hereinafter referred to as the ‘Act, 2007’) and Madhya Pradesh Private Medical and Dental Post Graduate Courses Entrance Examination Rules, 2009 (for short, ‘Rules, 2009’), which Act and Rules regulate primarily the admission of students in post graduate courses in private professional educational institutions and the provisions are also made for fixation of fee. In addition, the said Act and Rules also contain provisions for reservation of seats.

The challenge was made by private medical and dental colleges, which are unaided, i.e. they are not receiving any Government aid and are self financing institutions running from their own funds, initially in the High Court, which upheld the validity of these Acts and Rules. The Unaided Institutions challenged the Judgement of High Court in Supreme Court, which was heard by a Constitution Bench.

Proceedings before High Court:

The main contention of the Institutions before the High Court was that medical and dental colleges being private unaided colleges, it is their fundamental right under Article 19(1)(g) of the Constitution of India to lay down the eligibility criteria for admission and admit the students as well as fix their fee. It was also argued that private educational institutions cannot be foisted with the obligation to admit students of reserved class, which was the obligation of the State.

The High Court did not accept the contention of the Private Institutions and held that Article 19[6] of Constitution of India, permits the Government to regulate the admissions as well as fee, even of the private unaided educational institutions and that such measures saved by Article 19(6) of the Constitution as they amount to ‘reasonable restrictions’ imposed on the right of admission and fixation of fee, which otherwise vests with Private Institutions.

Summary of Judgement of the High Court is as follows:

(i) Re.: Admissions – The High Court was of the view that prescribing a Common Entrance Test for the purpose of admission to private unaided institutions are constitutional and valid since the same are in consonance with the dictum of the Constitution Bench judgment of this Court in the case of T.M.A. Pai Foundation. The High Court had held that there is no violation of the fundamental rights of the writ petitioners since the provisions constituted reasonable restriction as accepted by and, therefore, saved under Article 19(6) of the Constitution. The High Court held that the CET prescribed will ensure that the merit is maintained. It is also concluded by the High Court that sufficient material that was placed on record to establish that private unaided institutions were not able to ensure a fair, transparent and non-exploitative admission procedure.

(ii) Re.: Fee Regulation – The High Court held that the power of the Fee Regulatory Committee under the provisions was only ‘regulatory’ and the purpose of which was to empower the Committee to be satisfied that the fee proposed by the private professional institutions did not amount to profiteering or commercialisation of education and was based on intelligible factors which was not violative of the fundamental rights of the private professional institutions to charge their own fee.

(iii) Re.: Reservation – The High Court has examined the said provisions and concluded that sufficient number of seats were allotted for the unreserved category in different disciplines and subjects, and that a reasonable balance had been struck between the rights of the unreserved category candidates and the reserved category candidates.

Argument of Private Institutions in Supreme Court:

The central theme of the arguments of appellants was that by the impugned legislation the State seeks to wipe out the choice available with the appellants institutions to devise their own admission procedure and necessitate that the admission be carried out only on the basis of a CET to be conducted by the State Government or any agency appointed by it. In addition, the Act provides for the Committee to ‘determine’ and ‘fix’ the fees to be charged by the appellants and thereby completely trample the rights of the appellants to determine and charge the fee. The Act also provides for reservation in private institutions, including post-graduate courses, which the appellants submit is impermissible in light of the law laid down by this Court in the case of Ashok Kumar 21 Thakur v. Union of India & Ors.

It was their submission that right available to the appellants institutions is to devise their own admission procedure, subject to the condition that the procedure so devised ought to be ‘fair’, ‘transparent’ and ‘non-exploitative’. Thus, the rights available to the institutions under Article 19(1)(g) includes a right to admit students on a fair basis and as such the appellants can choose to admit students on the basis of the CET conducted by an association of institutions coming together (as has been provided in P.A. Inamdar) or one conducted by the State and the choice also includes to a right to admit students on the basis of the CET conducted by the Central Government. The right to choose is the right that is available to the individual institutions under Article 19(1)(g) and the impugned legislation abrogates the said right.

Observations of Supreme Court:

The Supreme Court speaking through the Constitution Bench observed as follows:

Re.: Provisions relating to Common Entrance Test:

The Supreme Court as has been held in earlier judgements, agreed that “Education”, as an “occupation” is a fundamental right which gives right to the educational institutions to admit the students and also fix the fee, at the same time, scope of such rights can be restricted and limited by appropriate legislations. While explaining the scope of this right, right to admit students and right to fix fee has been accepted as facets of this right. However, the Court again added caution thereto by mandating that admissions to the educational institutions imparting higher education, and in particular professional education, have to admit the students based on merit. For judging the merit, the Court indicated that there can be a CET. If such a power is exercised by the State assuming the function of CET, this was so recognised in T.M.A. Pai Foundation itself, as a measure of ‘reasonable restriction on the said right’.

On this background, Supreme Court was of the view that that the larger public interest warrants such a measure. The Court also considered evidences regarding malpractices, which are noticed in the CET conducted by such private institutions and concluded that in the larger interest and welfare of the students community to promote merit, add excellence and curb malpractices, provision for common entrance test is legal. The extent of restriction has to be viewed keeping in view all these factors and, therefore, the Court felt that impugned provisions, which may amount to ‘restrictions’ on the right of the appellants to carry on their ‘occupation’, are clearly ‘reasonable’ and satisfied the test of proportionality.

 Re.: Provisions in the Act Rules relating to fixation of fee

The Court observed that right to establish and manage educational institution is treated as a right to carry on ‘occupation’, which is the fundamental right under Article 19(1)(g), however cautioned that it does not entitle educational institution not to indulge in profiteering or commercialisation. It is also recognized that the educational institutions may charge the fee that would take care of various expenses incurred by these educational institutions plus provision for the expansion of education for future generation. At the same time, unreasonable demand cannot be made from the present students and their parents. For this purpose, only a ‘reasonable surplus’ can be generated.

It is, therefore, to be borne in mind is that the occupation of education cannot be treated at par with other economic activities. In this field, State cannot remain a mute spectator and has to necessarily step in in order to prevent exploitation, privatization and commercialisation by the private sector.

In order to see that the educational institutions are not indulging in commercialisation and exploitation, the Government is equipped with necessary powers to take regulatory measures and to ensure that these educational institutions keep playing vital and pivotal role to spread education and not to make money. So much so, the Court was categorical in holding that when it comes to the notice of the Government that a particular institution was charging fee or other charges which are excessive, it has a right to issue directions to such an institution to reduce the same. In our view, therefore, it is only a regulatory measure and does not take away the powers of the educational 69 institution to fix their own fee.

Provisions relating to relating to fixation of fee by setting up a Committee to oversee that institutions are not charging a fee which amounts to capitation or profiteering are reasonable restrictions and do not suffer from any constitutional vice.


 It is felt that in any welfare economy, even for private industries, there is a need for regulatory body and such a regulatory framework for education sector becomes all the more necessary. It would be more so when, unlike other industries, commercialisation of education is not permitted as mandated by the Constitution of India, backed by various judgments of this Court to the effect that profiteering in the education is to be avoided.

Holding of CET under the control of the State does not impinge this autonomy. Admission is still in the hands of these institutions. Once it is even conceded by the appellants that in admission of students ‘triple test’ is to be met, the impugned legislation aims at that. After all, the sole purpose of holding CET is to adjudge merit and to ensure that admissions, which are done by the educational 78 institutions, are strictly on merit. This is again to ensure larger public interest. It is beyond comprehension that merely by assuming the power to hold CET, fundamental right of the appellants to admit the students is taken away.

Likewise, when it comes to fixation of fee, as already dealt with in detail, the main purpose is that State acts as a regulator and satisfies itself that the fee which is proposed by the educational institution does not have the element of profiteering and also that no capitation fee etc. is charged.


The Court pending consideration of recommendation regarding issues relating to MCI, in exercise of powers of this Court under Article 142 of the Constitution decided to constitute a Committee to oversee the functioning of the MCI consisting of the following members: 1. Justice R.M. Lodha (former Chief Justice of India) 2. Prof. (Dr.) Shiv Sareen (Director, Institute of Liver and Biliary Sciences) 3. Shri Vinod Rai (former Comptroller & Auditor General of India). The said Committee will have the authority to oversee all statutory functions under the MCI Act. All policy decisions of the MCI will require approval of the Oversight Committee. The Committee will be free to issue appropriate remedial directions. The Committee will function till the Central Government puts in place any other appropriate mechanism after due consideration of the Expert Committee Report. Initially the Committee will function for a period of one year, unless suitable mechanism is brought in place earlier which will substitute the said Committee. We do hope that within the said period the Central Government will come out with an appropriate mechanism.


In view of the above, there was no violation of right of autonomy of the educational institutions in the CET being conducted by the State or an agency nominated by the State or in fixing fee. The right of a State to do so is subject to a central law.

Once the notifications under the Central statutes for conducting the CET called ‘NEET’ become operative, it will be a matter between the States and the Union, which will have to be sorted out on the touchstone of Article 254 of the Constitution.

EduLegaL View

This Judgement is really a landmark in the history of education sector. Till now, the famous trinity of T M Pai, Islamic Academy and P A Inamdar, used to operate separately and was used conveniently. There was compelling need to analyse the proposition laid down in all the three cases and explained in a one single judgement, so that the rights of educational institutions and limitation on those rights are well defined.

I also feel that some rights have to be balanced in a manner considering convenience of a larger community, more particularly, when a larger community is involved. Rights of Educational Institutions vis-à-vis the students have been beautifully balanced by the Constitution Bench.

Ravi Bhardwaj | 

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